Sapura Energy Bhd’s net profit plunged 74.23 per cent to RM28.93 million in the second-quarter ended July 31, 2017 from RM112.27 million in a year ago.

This was due to the lower revenue from drilling business segment and the financial impact arising from the cessation of the Berantai Risk Service Contract (Berantai RSC) during the quarter.

In a Bursa Malaysia filing today, Sapura Energy said its revenue decreased 1.19 per cent to RM1.66 billion from RM1.68 billion previously, mainly attributable to the lower revenue from drilling and exploration and production business segments.

For the first half, its earnings fell 74.6 per cent to RM56.46 million from RM222.57 million in the previous corresponding period. Its revenue slipped 5.2% to RM3.42bil from RM3.61bil a year ago.

Sapura Energy is cautious about its outlook.

“Industry condition continues to be challenging in the current financial year. While oil prices have stabilised, the group remains cautious on the outlook of recovery in the industry's capital spending in the near term,” it said.

The company is focused on strengthening its position in existing markets and expanding into new markets, re-basing costs and improving operational efficiency.

“We have seen an increase in tendering and bidding activities across key geographies in recent months,” it noted.

Sapura Energy said the development of SK310 B15 is on track and expected to begin its first gas production in the third quarter and provide long-term visibility on production.

“We anticipate the challenging environment to persist. However, we are confident that our strategic and operational plans that have been put in place will mitigate the impact and improve the position of the company in the longer term,” it added.